state university personnel and payroll internal control ... · june 19, 2012 state university...

Minnesota State Colleges & Universities – Office of Internal Auditing

State University Personnel and Payroll

Internal Control and Compliance Audit

Office of Internal Auditing

Reference Number 2012-06-005 Public Release Date – June 19, 2012

C O N T E N T S P A G E

I. Background 2

II. Audit Objectives, Scope, Methodology

and Conclusion

3

III. Audit Findings and Recommendations 4

IV. Long-Term Considerations 10

V. Response 14

Members of the MnSCU Board of Trustees

Chancellor Steven J. Rosenstone

State University Presidents

This report presents the results of our internal control and

compliance audit of state university personnel and payroll

expenditures. It contains nine findings and recommendations

to assist system office and university management in

improving business processes, controls, and accountability. In

addition, information on two areas is provided for system

leaders to consider for potential future change.

We conducted this audit in accordance with the Institute of

Internal Auditors: Standards for Professional Practice of

Internal Auditing.

The results of the audit were discussed with system office and

state university leadership on June 5, 2012.

We appreciate the excellent cooperation and assistance that

we received from university and system office employees.

Beth Buse, CPA, CIA, CISA

Executive Director

Executive Summary

Background

State university payroll expenditures were $534

million in fiscal year 2011.

Administration of personnel and payroll

activities is complex.

Each university is responsible for managing and

processing personnel and payroll transactions.

System office employees manage the HR

system and provide assistance and guidance to

universities.

Conclusion

Universities generally had adequate internal

controls over processing personnel and payroll

transactions and generally complied with

MnSCU policies and finance-related legal

provisions.

Findings and Recommendations

Institutions inaccurately paid some employees

upon separation (Finding 1).

The HR system inaccurately accrued leave for

some faculty (Finding 2).

System security was not limited for some

employees (Finding 3).

Improvements are needed for managing faculty

workload (findings 4, 5, and 6).

Some enhancements could improve payroll and

HR processing (Finding 7, 8 and 9).

Future Considerations for System Leaders

Faculty sick leave management

On-line course compensation and workload

The audit team was led by Melissa Primus and included the

following audit staff: Carolyn Gabel, Craig Fautsch,

Kim McLaughlin, and Marita Hickman

June 19, 2012 State University Personnel and Payroll Internal Control and Compliance Audit


Section I: Background

MnSCU’s total fiscal year 2011 expenses for salaries and benefits were approximately $1.25

billion of which universities totaled about $534 million or 43% collectively.1

Table 1: Fiscal Year 2011 University Salary and Benefit Expenditures

University

Salaries and

Benefits Expense

Percent of Total

University Salaries

and Benefits

Bemidji State University (BSU) 50,465,000 9%

Minnesota State University, Mankato (Mankato) 125,539,000 24%

Minnesota State University Moorhead (Moorhead) 62,034,000 12%

Metropolitan State University (Metro) 45,829,000 9%

Southwest Minnesota State University (SMSU) 30,977,000 6%

St. Cloud State University (SCSU) 142,467,000 27%

Winona State University (WSU) 76,522,000 14%

Total $533,833,000 100%

The Board of Trustee’s approved an internal control and compliance audit of university personnel

and payroll as part of the Office on Internal Auditing’s fiscal year 2012 audit plan.

Each university is responsible for managing and processing personnel and payroll transactions.

The system office ITS Division manages a human resource (HR) system (SCUPPS) which

interfaces with the State of Minnesota payroll system (SEMA4). SCUPPS is one of many

modules within the Integrated Student Record System (ISRS). The system office HR and Finance

Divisions provide assistance and guidance to universities.

The variety and complexity of bargaining agreements makes administering personnel and payroll

activities challenging. The largest employee group is faculty whose employment provisions are

detailed in the Inter Faculty Organization (IFO) Master Agreement (referred to hereinafter as the

“IFO Agreement”). Appendix A includes examples of classified and unclassified employee

positions and associated bargaining agreements; in addition, the appendix includes the number of

employees within each bargaining agreement at June 30, 2011.

Appendix B cites several relevant terms related to state university employee compensation.

1 Minnesota State Colleges and Universities Supplement To The Annual Financial Report For The Year Ended

June 30, 2011

June 19, 2012 University Personnel and Payroll Internal Control and Compliance Audit


Section II: Audit Objectives, Scope, Methodology, and Conclusion

Objectives

The objectives for this audit were to answer the following questions:

Were internal controls adequate to ensure that each university accurately compensated

employees, maintained accurate leave records, and properly recorded payroll transactions in

the accounting system in accordance with management’s authorizations and complied with

applicable policies, procedures and employee bargaining agreements and contracts?

For the items tested, did each university comply with significant finance-related legal

requirements including applicable policies, procedures, and employee bargaining agreements

and contracts?

Scope

Our audit reviewed current internal controls and transactions for fiscal years 2009, 2010, 2011,

and 2012 through December 31, 2011.

All state universities except Metropolitan State University. Metro was excluded because the

Office of the Legislative Auditor conducted an internal control and compliance audit which

included personnel and payroll expenditures. The OLA’s report was issued in January 2012.

Areas of focus:

o User security access to payroll and HR systems (SEMA4 and SCUPPS)

o Base assignments and salaries (classified and unclassified employees)

o Supplemental assignments – (applicable for faculty with pay above their base pay)

o Leave records (unclassified employees)

o Separation pay (classified and unclassified employees)

Methodology

To answer these questions, we interviewed university employees and reviewed relevant

documentation, including policies, procedures, or guidelines, and internal control documentation

to gain an understanding of each university’s controls. We considered risks of fraud and errors

and potential noncompliance with finance-related legal requirements in designing our audit

approach. We analyzed data to identify unusual transactions or significant changes. We reviewed

security access to identify transactions that university staff can initiate, approve or process to

determine whether access is based on need and duties are adequately separated. In addition, we

selected a sample of transactions and reviewed supporting documentation to test whether the

university’s controls were effective and if the transactions complied with policies, procedures,

guidelines and bargaining agreements and contracts.



Overall Conclusion

State universities generally had adequate internal controls to ensure they accurately compensated

employees, maintained accurate leave records, and properly recorded payroll transactions in the

accounting system in accordance with management’s authorizations. For items tested, the

universities generally complied with applicable policies, procedures and employee bargaining

agreements and contracts. However, we identified some control deficiencies and non-compliance

with MnSCU requirements as discussed in Section III: Audit Findings and Recommendations.

In section IV, we provide information on two topics, faculty sick leave management and on-line

course compensation and workload that system leaders will want to review to determine whether

future changes are needed.

Section III – Audit Findings and Recommendations

1. Universities and colleges inaccurately paid some employees upon separation; we also

noted some control deficiencies related to employee separation pay at universities.

Board Authorized Employee Separation Incentives (BESI) were offered to some employees

during fiscal years 2009 through 2012. Some of the BESI payments were not accurately

calculated or paid. The system office HR division leadership alerted us that some BESI payments

were not accurate due to errors. A template (BESI calculator) was developed to assist institutions

in determining the BESI payments. The BESI calculator contained an error for computing the

employer portion of FICA and Medicare withholdings. This error affected employees that

reached the maximum annual FICA and Medicare withholding limit of $106,800, causing

underpayments to those employees. The system office HR division created a revised BESI

calculator for institutions to correct the error. This error occurred at 11 colleges and universities

and the system office and may have impacted over 70 separated employees. The system office

HR division recommended each college and university review all BESI payments and correct any

errors by June 30, 2012.

Unrelated to the error described above, two universities overpaid BESI payments to employees

for the amount equal to the employer share of FICA and Medicare withholdings. One of these

universities also inaccurately calculated its deposit to the employee’s Health Care Savings Plan

because it used an incorrect monthly insurance premium to compute the deposit. Both

universities are working to remedy the combined overpayments of approximately $165,000.

We also noted the following items related to employee separation pay:

Independent reviews of severance calculations were not always performed. An independent

review would help ensure that employees were eligible for severance payments, the

calculations were accurate, and payments were accurately entered.

Employee leave records were not always reduced by the amount of leave liquidated for

separation payments. Compensated absence liability balances are inflated if leave records are

not reduced for leave paid out.



One university did not retain documentation to support its severance calculations.

Standard templates or other tools were not available for institutions to use in determining

severance pay eligibility or calculating severance payments. Eligibility for severance pay and

the severance calculations vary by bargaining contract. Standard templates would help ensure

consistency when calculating severance payments.

Recommendations

The system office should continue to work with institutions to ensure BESI

overpayments and underpayments are corrected.

Universities should perform an independent review of severance payment

calculations.

Universities should reduce employee leave records for the amount of leave

paid out at the time of separation.

Universities should retain documentation to support separation payments.

The system office should work with the universities to develop templates or

other tools to calculate severance eligibility and payments for the various

bargaining agreements.

2. The HR system did not accrue sick leave for faculty in compliance with the IFO

Agreement.

The IFO Agreement allows faculty to earn nine days of sick leave in an academic year (4.5 days

per term) plus three additional days for summer sessions (12 days total). However, due to an

interpretation error, faculty who did not have summer appointments but did have additional

assignments during the academic year were allowed to accrue up to 12 days of leave; therefore,

exceeding the nine day maximum for employees without a summer appointment. Furthermore, a

programming error caused some faculty with summer appointments to earn leave in excess of 12

days. In fiscal year 2011, approximately 90 faculty accrued more than 12 days each. This error

could result in faculty receiving sick leave benefits or separation compensation they are not

eligible for.

We also noted some additional errors related to leave accruals. Two universities misinterpreted

the plan or contract language for initial balances when three employees moved between plans

resulting in employees accruing more leave than eligible. In addition, another university did not

accrue leave for some part-time faculty because it did not set up a leave schedule for those

faculty.

Recommendations

The system office should ensure the HR system accurately records sick leave.

The system office should work with the universities to identify faculty who

accrued more sick leave than eligible and correct those errors.

The system office should provide guidance to universities for determining

initial leave balances when employees move between bargaining plans.

Universities should establish leave schedules for part-time faculty, where

appropriate.



3. Five universities did not adequately limit system access.

Our review of employees with access to HR and payroll systems found that five universities did

not limit access based on job responsibilities. 22 employees had view or update rights to the

systems that exceeded job responsibilities. In addition, we noted five instances where security to

the HR and payroll system was not removed when employees left employment. This access could

have allowed employees to complete unauthorized transactions or view non-public data.

Recommendations

Universities should ensure that access to HR and payroll systems are based on

job responsibilities.

Universities should timely remove access for employees that are no longer

employed.

4. Due to system limitations and inconsistent coding, the system (ISRS) is not an effective

tool for managing and oversight of faculty workloads.

We noted problems within ISRS that limit its usefulness for managing and oversight of faculty

workloads. Our review noted some incorrect and inconsistent coding within the HR system. In

addition, we noted that the design for calculating some information in the HR system does not

give an accurate reflection of an employee’s workload. Furthermore, course data within ISRS is

not integrated with faculty assignment data.

Employee work assignments are entered into the HR system using various data fields.

Assignment type codes are used to differentiate faculty compensation activities (e.g. instruction,

chairperson, research, overload, summer instruction). A credit field is used to indicate the

number of credits faculty are assigned to teach for a corresponding time period (summer, term, or

academic year).

Below are examples where we noted inconsistent data for faculty assignments:

On-line instruction: one university did not use the appropriate assignment type code for online

instruction compensated via the packaged course provision of the IFO Agreement.

Chairperson: one university incorrectly entered credits for faculty chairperson assignments.

Entering credits for these assignments inflates individual faculty and institutional credit

analyses.

Non-instructional: universities coded credits to assignment type codes that were for non-

instructional activities. During fiscal years 2011 and 2012, universities coded 546 credits to

these types of assignment codes.

Coaching: Some coaching assignment codes require credits to be entered and others do not.

An analysis of fiscal year 2011 and 2012 data showed that universities entered 4,247 credits

for coaching activities.

The following items are examples of system limitations related to faculty assignments:

Summer chair assignments: the HR system is designed to treat instruction and chair activities



differently during the academic year than during summer sessions. During the academic year,

instruction and chair duties are noted as separate assignments. However, during summer

sessions, these assignments are not separated. Therefore, the HR system does not accurately

capture the number of credits taught by chairs during summer sessions.

FTE calculation: the HR system calculates an overall FTE (full-time equivalent) for each

employee for the fiscal year. University presidents are required to approve any assignments

that place a faculty member above a 1.33 FTE during a fiscal year. Although the formula to

determine if an employee exceeds 1.33 FTE excludes some assignment types (such as summer

instruction, overload and compensation via the packaged course provision), those assignments

are included in the HR system FTE calculation. Thus, a manual calculation is required to

determine if presidential approval is needed. Thus, requiring a manual calculation to

determine if presidential approval is needed.

Assignment type code 4015: HR guidelines require faculty assignments that are approved to

exceed 1.33 FTE in a fiscal year to be coded to a specific assignment code (4015). However,

this results in data inconsistencies since the definition for the use of this code is for pay that

does not fit into any other assignment type code.

We also noted instances where changes to faculty assignments were not always documented in

the ISRS HR and Course Term modules. For example, we noted instances where:

Course data inaccuracies: the data showed faculty teaching more or less credits than noted in

the HR system. Upon further inquiry with academic staff, we were told the course data had

not been updated for changes in instructors.

Faculty assignment inaccuracies: faculty instructional loads changed, such as a faculty

member was re-assigned to work on a grant. However, the reassignment information was not

forwarded to the HR office. Thus, the HR system showed the employee teaching a full-credit

load.

Faculty assignment of full-load: faculty taught one or two credits less than the instructional

credit assignment noted in the HR system. Upon further inquiry with academic staff, we were

told faculty members were considered at full load. The IFO Agreement states that faculty

workloads shall not exceed 14 credits per semester and 24 credits per academic year; but it

does not define minimum credits that must be taught.

In addition to these data inconsistencies, course data is not integrated with the HR system.

Although the HR system contains information related to how many credits of instruction a faculty

member has been assigned, the current course data does not provide information to indicate which

courses are taught as part of base salary, overload, supervised instructional activities not eligible

for overload or courses compensated using the packaged course provision. This requires

academic deans and HR staff to rely on supplemental systems for determining and monitoring

faculty workload and assignments.

Academic deans typically manage workloads for a large number2 of faculty making the need for

automated systems more critical. For example, we reviewed one instructor’s schedule that

contained 35 courses for a term; including courses taught as part of load, supervised instructional

2 Our analysis of fiscal year 2012 data showed that most university deans supervise more than 100 faculty members,

including 10 deans who supervise between 100 and 150 employees, eight deans who supervise between 150 and 200,

and three deans that supervise 227, 277, and 299 employees.



activities, and courses that were taught through the packaged course provision. The dean is not

easily able to determine which courses, if any, may be eligible for overload because HR system

reports do not identify which courses are considered part of load (base salary). This is further

complicated at one university where a significant number of online courses are managed by an

academic dean that is not the supervisory dean. Without integrated tools, deans and HR staff

cannot easily determine or monitor whether employees are eligible for supplemental pay

(overload, online course, summer).

These issues contribute to difficulty in using ISRS data for managing and oversight of faculty

workloads. These inconsistencies also result in decreasing the usefulness of data for analysis at

individual institutions or system-wide.

Recommendation

The system office should work with colleges and universities to determine what

changes are needed to provide data consistency for managing and oversight of

faculty workloads.

5. Standards do not exist to help provide consistency for some faculty workload

assignments.

The system office and individual universities have not documented standards for faculty

assignments for department chairs with extended chair assignments and faculty supervised

instructional activities. We noted varying practices in how universities, including academic

departments within the same university, managed these assignments. The variances resulted in

additional compensation for some faculty while in other cases the work was considered part of

another assignment and did not result in additional compensation. The IFO Agreement provides

flexibility in assigning workload to faculty but without documented standards, universities cannot

ensure faculty assignments for these activities are treated in a similar manner.

Recommendation

The system office should work with universities to help develop standards for

extended chair and supervised instructional activity assignments.

6. The 224 duty day limit does not include all assignment types.

The HR division has a guideline3 that specifies requirements for certain faculty assignments that

exceed 1.33 FTE or 224 duty days within a fiscal year be approved by the president. The logic

associated with the 224 duty day limit is that it represents a workload equivalent to a full-time,

year-long assignment. The IFO Agreement establishes 168 duty days as the basis for a full-time,

nine month faculty appointment. Thus, 224 duty days would represent the equivalent of a twelve

month full-time assignment.

While we found that universities were having presidents approve assignments over 224 duty days,

we do not believe that the 224 duty day limit is an effective control to monitor faculty workloads

3 Guideline CMP 0010: http://www.hr.mnscu.edu/guide_interpretations/documents/CMP0010_2.pdf

http://www.hr.mnscu.edu/guide_interpretations/documents/CMP0010_2.pdf



since it does not include some assignment types. For example, other instructional assignments

such as summer session, overload and courses compensated under the packaged course provision

are not included in the 224 duty day formula. In addition, the guideline requires faculty to

maintain a log of activities performed that must be sent to the system office Labor Relations unit.

We noted that universities were not complying with this part of the guideline.

Recommendation

The system office should work with the universities to re-evaluate this

requirement to determine if a more effective and inclusive measure exists to

monitor and control faculty workloads.

7. Payroll reconciliation processes are inefficient.

Exception reports are not available for performing routine payroll reconciliations; instead payroll

staff complete labor intensive reconciliations using lengthy detailed reports. Reconciliations are a

key internal control to ensure the accuracy of payroll expense each pay period.

The system office provides training and guidance to colleges and universities on reconciliations

that need to be completed timely each pay period. Currently, several reports are recommended to

be printed, reviewed, and reconciled with each other to ensure payroll expenses were accurate and

properly recorded. Several of the reconciliations require a comparison at the very detailed

employee level. Besides being more time consuming, manual reviews are prone to more error.

Recommendation

The system office should work with institutions to develop exception reports

that would identify transactions that merit further review by payroll and HR

staff rather than relying on institutions to review all transactions.

8. The e-TimeSheet system is not designed for faculty use.

Currently, all college and university staff except faculty utilize the e-TimeSheet system for

requesting and tracking leave. The e-TimeSheet system has not been designed to

accommodate leave recording and tracking by faculty. As a result, faculty continue to

utilize paper leave slips for requesting leave, supervisors manually authorize leave taken,

and staff enter leave taken into the HR system where balances are maintained. In addition,

universities must annually inform faculty of individual leave balances. Manual processes

tend to be more inefficient and prone to error.

Recommendation

The system office should work to develop a timeline for adding functionality to

the e-TimeSheet application for tracking and recording of faculty leave.



9. System office HR and payroll guidance and documentation available for

university staff is difficult to locate.

The system office provides guidance and documentation for managing HR and payroll

activities. Guidance comes in many different forms such as emails, online training

materials, guidelines, and procedures. However, the guidance is located in different

locations making it difficult to find. For example, the HR Division has developed

guidelines which are not located with the Board policies, procedures and guidelines.

Other guidance has been disseminated in emails and information is available on a variety

of MnSCU websites.

Recommendation

The system office should streamline the locations of HR and payroll guidance and

documentation.

Section IV – Long-Term Considerations for System Leaders

Two additional areas were identified during our audit that merit review of current practices.

Faculty Sick Leave Management

Faculty sick leave management has historically been complex, labor intensive, and prone to error.

Leave accrual calculations are complicated due to the numerous faculty appointment scenarios

that exist and that can change each term. Other than the errors noted in Finding 2, our sampling

did not note any significant errors in leave balances or in leave taken. However, we did observe

how difficult and time-consuming managing faculty leave can be. We offer some background

and data analysis to consider for possible future change to help simplify the process.

Under the IFO Agreement, faculty members are eligible for three types of paid leave:

Bereavement leave: approved for each qualifying bereavement incident.

Personal leave: up to three days of personal leave are granted each fiscal year. Personal leave

does not accrue; if days are not used, they lapse and are unavailable in future fiscal years and

are not liquidated at time of faculty separation.

Sick leave: accrues based on assignments with a maximum of 12 days per fiscal year. Upon

separation, faculty employed for more than 10 years of service are eligible for severance pay

of 40% of their sick leave balance4. Employees with more than 25 years of service are

eligible for 45-50% of their sick leave balance.

We completed data analysis of leave taken by faculty during our audit scope. As shown in

Table 2, faculty utilized personal leave at about the same percentage as sick leave. For

comparative purposes, we also analyzed the percentage of sick leave usage by university

administrators over the same period because they are both unclassified employee groups and

4 Sick leave balance (base) not to exceed 125 days resulting in a potential maximum payout of 50 days.



leave accruals are similar. We noted a much lower percentage of faculty sick leave usage. For

example, as shown in Tables 2 and 3, in fiscal year 2011, 76% of administrators utilized sick

leave compared to 19% of faculty that used sick leave.

Table 2: State University Faculty Leave Taken During FY 2009 – 2011

FY

Faculty

Headcount*

Personal Leave Sick Leave

# of Faculty % of

Faculty

# of

Days

# of

Faculty

% of

Faculty

# of

Days

2009 3,168 656 21% 1,236 608 19% 3,207

2010 3,372 647 19% 1,178 635 19% 3,041

2011 3,456 662 19% 1,209 641 19% 3,204 *Faculty that earned leave during FY09-FY11

Source: Internal Auditing review of leave data from data warehouse for all seven universities.

Table 3: State University Administrator Leave Taken During FY 2009 – 2011

FY

Administrator

Headcount*

Sick Leave

#

Administrators

% of

Admin

# of Days

2009 139 105 76% 698

2010 145 114 79% 830

2011 144 110 76% 933 *Administrators that earned leave during FY09-FY11

Source: Internal Auditing review of employee leave data from data warehouse for all seven universities.

We then analyzed the length of service for all faculty that separated from employment during our

audit period. Faculty can accrue the maximum number of sick days (125 days) for severance

payout in 11 years of service with summer appointments. Table 4 shows the results of this

analysis and illustrates the majority of faculty had over 20 years of service at the time of

separation. Based on an analysis of leave balances prior to separation, approximately 90% of

faculty with over 20 years of service were eligible for the maximum severance.

Table 4: Number of Faculty Receiving Severance during Fiscal Years 2009 – 2012

Length of Service Number of Faculty

Receiving Severance

Payments

< 12 years of service 7

12 – 19 years of service 66

> 20 years of service 283 Source: Internal Auditing review of employee HR assignment data from data warehouse for all seven universities.

Other reasons for considering simplifications to sick leave management include:

It has been difficult to design the HR system to take into account the complicated leave

accrual scenarios for full-time and part-time faculty. (See Finding 2.)



Administrators at universities discussed the difficulty in adequate recording of sick leave

taken by faculty. For example, if a faculty member is out ill for a week during the academic

year, but only has scheduled classes on three days during the week, administrators would

expect the faculty member to take five days of sick leave since they would have missed five

duty days. This concept is difficult to convey and enforce.

As discussed in Finding 8, faculty currently do not use the e-TimeSheet application. Adding

functionality to the application would require information technology resources.

Because of past issues noted with sick leave balances many institutions have implemented

procedures to manually review sick leave balances prior to paying out severance pay.

Recommendation

System leaders should consider alternative methods to simplify the

administration of sick leave accounting. For example, one HR administrator

believes the answer to simplifying faculty sick leave management would be to

eliminate faculty sick leave, offer short-term disability benefits for extended

illnesses, and negotiate specific severance packages based on years of service

for faculty separations.

On-line Course Compensation and Workload

The IFO Agreement allows faculty to be paid additional compensation for packaged courses;

however, the provision does not limit the number of courses or credits that can be taught. During

the audit period, BSU, Mankato, Moorhead5, and SCSU utilized the packaged course provision to

compensate faculty for teaching on-line courses in addition to their regular faculty appointments.

As a result, we found that some faculty taught heavy online course loads in addition to their

regular appointments. Significant financial incentive exists to accept high workload.

Table 5 documents the number of faculty paid during fiscal years 2009 through 2011 via the

packaged course provision; this is in addition to base salary or any other additional pay received.

The packaged course provision allows institutions to compensate faculty at a rate of $65 per

student per credit taught. Table 5 also provides an estimate of the number of student credits

generated via the packaged course provision.

The IFO Agreement does not establish a maximum amount that may be earned under the

packaged course provision. However, the IFO Agreement does suggest limitations on instruction

for overload and summer. Specifically, the IFO Agreement states:

Limitation. Normally, total workload including overload shall not exceed sixteen (16)

credits per semester and total overload shall not exceed five (5) credits per academic

year.” [Article 12, Section D]

Workload. A full-time summer session workload shall consist of no more than six (6)

credit hours. The total workload over summer session shall not exceed (sixteen) 16

credits. [Article 13, Section A]

5 Moorhead management indicated that they plan to stop using the packaged course provision in fiscal year 2013.



Table 5

Faculty Paid for Teaching Online Courses Compensated

Via the Packaged Course Provision for FY09 – FY11

Amount Paid per Faculty

Member (1) (2)

Approximate

Student

Credits

Generated

# of Faculty Paid

FY09 FY10 FY11

$70,000 - $120,000 1,076 – 1,846 5 7 6

$50,000 - $69,999 769 – 1,076 9 8 14

$30,000 - $49,999 461 – 769 25 27 24

Less than $30,000 <461 174 179 175 Notes:

(1) Pay is only for online courses compensated via the packaged course provision.

(2) Data does not include adjunct faculty. Data also excludes online courses paid via packaged course provision for

Moorhead.

Source: Internal Auditing review of employee HR assignment data from data warehouse.

We observed faculty teaching numerous online courses compensated via the packaged course

provision. We attempted to analyze course and enrollment data but many variables exist and as

we noted in Finding 4, course data does not indicate how courses were compensated (normal

workload, overload, packaged course provision); therefore, comparable course and enrollment

data is not readily available.

We analyzed the packaged course provision based on student credits generated. For example,

although course enrollment varies, a three-credit course of 25 enrolled students would generate 75

student credits. The IFO Agreement does not define normal workload in terms of number of

student credits generated; however, using the “normal workloads” as defined above, faculty

teaching a full teaching load, plus overload and summer could generate about 1,200 student

credits (estimating 25 students each course). Of course, actual enrollment levels will vary with

some courses having lower or higher enrollment. Universities have flexibility to adjust workload

to compensate for the larger, auditorium style courses. However, as noted in Table 5, some

faculty generated an additional 1,000 student credits under the packaged course provision above

their “normal workload.”

The packaged course provision provides flexibility for universities to offer courses where low

enrollment might otherwise prohibit offering the course. However, high credit loads may impair

academic quality and create undue stress on faculty. In addition, we noted some faculty were

compensated under the packaged course provision for supervised instructional activities which are

not normally eligible for additional compensation.

Recommendation

The system office should work with universities to review the packaged course

provision and consider developing guidelines that would address workload.

V - ResponseJune 19, 2012 State University Personnel and Payroll Internal Control and Compliance Audit




Appendix A

University Employee Headcount6 by Bargaining Agreement as of June 30, 2011

Bargaining

Agreement

Types of Positions

BSU

Mankato

Metro

Moor

-head

SCSU

SMSU

WSU

Unclassified Employees IFO:

Inter Faculty

Organization

Faculty (adjunct or full-

time), library faculty,

coaches, counselors

303 928 680 550 934 225 566

Non-Unit Faculty Teaching faculty 131 249 248 182 346 111 158

MSUAASF:

Minnesota State

University Association of

Administrative and

Service Faculty

Financial aid directors,

registrars, admissions

directors

76 172 112 99 202 74 125

Excluded Administrators

President, VPs, deans,

facilities directors,

business managers

19 42 24 27 46 14 28

Classified Employees

AFSCME: American

Federation of State

County and Municipal

Employees

Electricians, plumbers,

account clerks, general

maintenance workers

157 415 147 181 397 85 250

MAPE: Minnesota

Association of

Professional Employees

IT, Accounting Officers 38 103 59 42 124 24 65

Minnesota Government

Engineer Council

Engineer 0 11 0 0 0 0 0

MMA: Middle

Management Association

Director of Information

Systems, Accounting

Supervisor, Physical

Plant Supervisor,

Grounds Supervisor

12 35 15 15 28 8 22

MNA: Minnesota Nurses

Association

Registered Nurse <57 <5 0 <5 <5 0 7

Health Non-

Professionals

Licensed Practical

Nurse or Certified

Medical Assistant

<5 <5 0 <5 <5 0 <5

Health Treatment

Professionals

Pharmacist or Physician

Assistant 0 <5 0 <5 <5 0 0

Commissioner’s Plan Personnel Officers,

Assistant to the

President

9 16 15 8 13 <5 10

Non-Unit Staff Employee with too few

hours to be part of

above bargaining units

14 18 6 27 93 6 14

Source: MnSCU ITS Management Reports (HR Payroll Reports)

http://www.its.mnscu.edu/reportanddataservices/managementreports/index.html

6 Counts are unduplicated within a bargaining unit. However, if an employee is in more than one bargaining unit, the

employee will be counted in both bargaining unit counts. 7 Headcounts not provided for bargaining units where employee headcount is less than five employees.



Appendix B

Relevant Definitions for State University Employee Compensation

Term Definition Reference

Academic

Year

An academic year shall consist of 168 duty days. It begins with

the start of fall semester and ends with the completion of spring

semester.

IFO Agreement8 Article 5,

Section M and Article 10,

Section D, Subd. 1

Adjunct

Faculty

Assignment

An adjunct faculty member shall not teach more than ten (10)

credits in any one (1) academic year.

IFO Agreement Article 21,

Subd. 3

Base Salary Salaries of tenured, probationary, fixed-term, and non-tenure

track faculty members will be at the rate set forth on salary

schedules as full-time nine-month (168 days) base salaries.


Subd. 1

Board

Authorized

Employee

Separation

Incentives

The Board of Trustees adopted Board Policy 4.11 Board

Authorized Early Separation Incentive Program on 7/22/09

allowing institutions to implement time-limited early separation

incentives authorized by Minnesota Statutes 136F.481 with a

goal to reduce salary and benefit obligations, reallocate

resources or achieve other cost savings or efficiencies.

Policy 4.11 Board Early

Separation Incentive

Program

Chairperson

(Academic

Department

Chairperson)

The chair provides academic and administrative coordination,

and fosters an environment which enhances individual and

departmental growth and development. [This appointment is not

considered a supervisory role.]

IFO Agreement, Article

20, Section B, Subd. 1

Classified

Service

(Employee)

Classified service means all positions now existing or hereafter

created in the civil service and not specifically designated

unclassified pursuant to section 43A.08.

Minnesota Statute 43A.02,

Subd. 12

Course Term

Module

ISRS Course Term Module contains data for courses offered in a

term and contains key information for the courses such as course

name, credits, course level, instructor name, and room location.

n/a

Duty Day A day included in the university calendar or individual faculty

member’s appointment on which a faculty member engages in

duties as described in this Agreement.


Section N

FICA Federal Insurance Contributions Act (FICA) tax is withheld

from salary or self-employment income that funds the Social

Security and Medicare programs

n/a

Extended

Chair

Assignments

All chairs of departments of five (5) or more FTE members shall

be offered appointments of at least one hundred ninety-six (196)

duty days; however, a chairperson may decline any portion of

the schedule beyond one hundred sixty-eight (168) days. The

one hundred ninety–six (196) duty days of the extended

appointment shall consist of the one hundred sixty-eight (168)

academic duty day schedule plus twenty eight (28) additional

duty days which shall be mutually agreed upon by the chair, the

Association, and the President / designee.


Section C, Subd. 1

Extended Faculty members appointed to a duty year which exceeds the IFO Agreement Article 10,

8 2009 – 2011 IFO Master Agreement between MnSCU Board of Trustees and the Interfaculty Organizations




Appointments

(extra duty

day)

one hundred sixty-eight (168) duty days as provided in Subd. 1

of this section shall receive a pro rata salary adjustment. The

scheduling of extra duty days shall be determined in consultation

with the faculty member consistent with the needs of the

university. Extra duty days normally shall not be scheduled on

the days indicated in Subd. 1. [Extra duty day daily rate = Base

salary / 168 duty days]

Section D, Subd. 2

Faculty

Workload

The workload of faculty includes student advising, maintaining

and improving expertise in a discipline and in pedagogy, serving

on departmental and university committees, contributing to

student growth and development, evaluating student

performance, scholarly activities, and service to university and

community, as well as teaching and class preparation.

Additionally, as a professional, a faculty member shall devote a

substantial amount of his / her workload to course preparation,

research, the maintenance of professional expertise, innovations

in teaching / learning and other similar activities.


Section A

Miscellaneous

Instructional

Categories

Faculty members providing packaged courses or correspondence

courses approved by the President/designee shall be

compensated at the rate of $65 per credit hour per student.

Referred to throughout the report as “packaged course

provision.”


Section A, Subd. 6

Overload An overload shall be defined as a specific assignment,

acceptable to the faculty member and approved by the President

/ designee, occurring within a faculty member’s period of

appointment, which in excess of the faculty member’s workload

as defined in Article 10 and in Article 13, Section A.


Section A

Overload

Application

Examples of activities excluded from overload pay include but

are not limited to the following: internship, independent studies,

student teacher supervision, graduate thesis supervision,

tutoring, studios and related kinds of individualized instruction,

the pyramiding of multi-level courses, and substitution for an

absent faculty member on a short-term basis. Referred to

throughout the report as “supervised instructional activities.”


Section C

Overload Rate Overload compensation shall be granted to faculty members for

approved assignments involving the teaching of courses,

workshops, seminars, and institutes in addition to the workload

as defined in Article 10 and in Article 13, Section A. Such

overload compensation shall be at the rate of two and one

quarter percent (2.25%) of the faculty member’s nine- (9) month

base salary, but not less than the minimum adjunct rate set forth

in Article 11 for each semester credit hour.


Section B, Subd. 1

Packaged

Course

Provision

See “Miscellaneous Instruction Categories” n/a

Release Time Release time shall mean the granting of a paid exemption from IFO Agreement Article 5,




and

Reassigned

Time

duties normally required or performed. Such release time will

be for one or more duty days and does not include sick leave and

emergency or personal leave time. Reassigned time shall mean

an alternative assignment other than classroom teaching for one

or more credit hours during the academic year or summer. For

those faculty whose primary assignments are non-classroom

instruction, e.g. coaches, librarians and counselors, reassigned

time shall mean an alternative assignment other than their

principal assignment to fulfill the professional development

criteria of Article 22.

Section Y

SCUPPS State Colleges and University Personnel and Payroll System

(SCUPPS) is the MnSCU human resource application.

n/a

SEMA4 Statewide Employee Management System (SEMA4) is the State

of Minnesota payroll, human resource and benefits systems.

MnSCU’s HR application interfaces with SEMA4 and

employees are paid through the SEMA4 system.

n/a

Summer

Session Rate

A faculty member accepting a summer or alternative session

teaching assignment shall receive two and one-quarter (2.25%)

of his / her nine- (9) month base salary for the preceding

academic year per credit hour, but not less than the minimum

adjunct rate for the preceding academic year as set forth in

Article 11.


Section C

Summer

Session

Workload

A full-time summer session workload shall consist of no more

than six (6) credit hours. The total workload over summer

session shall not exceed (sixteen) 16 credits.


Section A

Supervised

Instructional

Activities

See Overload Application. n/a

Teaching Load A faculty member’s teaching load shall not exceed 14

undergraduate credit hours per semester nor 24 credit hours per

academic year.


Section A, Subd. 1

Unclassified

Service

(Employee)

Unclassified service means all positions designated not being

classified pursuant to section 43A.08.

43A.08 indicates that presidents, vice-presidents, deans, other

managers and professionals in academic and academic support

programs, administrative or service faculty, teachers, research

assistants, and student employees eligible under terms of federal

Economic Opportunity Act work study program in the Perpich

Center for Arts Education and Minnesota State Colleges and

Universities, but not the custodial, clerical, or maintenance

employees, or any professional or managerial employee

performing duties in connection with the business administration

of these institutions.

Minnesota Statute 43A.02,

Subd. 39 and 43A.08,

Subd. 1(9)

state university personnel and payroll internal control ... · june 19, 2012 state university...

Documents